9 Things Every Twentysomething Should Know About Her Finances

Managing your money can be seriously daunting, especially right after college. Lots of twentysomethings can land in the real world without knowing how to balance a budget, let alone manage loan payments and credit card bills.

Three-quarters of young people say money is a somewhat or very significant source of stress, according to a report from the American Psychological Association. There's good news though: Twentysomethings are more responsible with their money than Generation X is right now, and that's likely because they grew up in a recession, according to Financial Finesse, a think tank. But there's way more that you need to know.

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"Your 20s are about setting yourself up independently, learning to pay your own bills and manage cash flows, but it's also where you're learning how to make money," Tom White, CEO and co-founder of financial planning firm iQuantifi, tells Cosmopolitan.com. But without the right level of financial education, you could be setting yourself up for failure. Here are nine things you should be doing in your 20s to ensure you don't end up broke down the line.

1. If you have a 401(k), use it.

A recent survey by the Insured Retirement Institute and the Center for Generational Kinetics found that young people have totally unrealistic goals when it comes to retirement: a whopping 70 percent think they'll spend less than $36,000 a year in their old age, and 15 percent think the lottery is a viable retirement strategy. (Yes, seriously.) You'll definitely need more than you think for your retirement, especially since pensions are getting rarer and Social Security payments are getting smaller. The exact amount you should save depends on the income and lifestyle you're used to now, but experts say you should save a bare minimum of 4 percent of your pretax income, and as much as 18 percent if you make more money, in order to have around 85 percent of your working income when you retire.

When you're setting up your 401(k) or Roth IRA, it pays to invest in a "target" fund for your retirement; these automatically adjust how risky the investments are over time, says Greg McBride, chief financial analyst for financial news site Bankrate.com. If you're in your 20s, it's riskier, and as you age, it becomes more and more conservative to make sure your "nest egg" is secure.

If your employer offers a 401(k) match program, contribute at least enough to meet the match threshold. So if your workplace will match up to 3 percent of the money you contribute to your 401(k), make sure you're putting away at least that amount of your paycheck. Otherwise, you're throwing away free money. If you don't have a 401(k), open a Roth IRA at most major banks or a MyRA account through the U.S. Treasury and try to save as much as you can. The contributions for either account are usually automatically deducted from your paycheck, so it's easy to set it and forget it.

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2. Save. And then save some more. And then save even more.

"People want to ignore tomorrow because they're thinking about today," says Amy Podzius, director of field consulting at TIAA-CREF, a financial services company. "Sometimes saving money is an afterthought." You should have an emergency savings of at least three to six months of your expenses, including rent, car payments, groceries, and utility bills. Keep it in either a checking or a savings account so you can easily withdraw it if you need to. And when it comes to retirement, start saving as soon as you can: If you start contributing to a retirement account at 25 rather than at 35, you could end up $600,000 richer by the time you retire, Kathy Pickering, executive director of H&R Block's Tax Institute, tells Cosmopolitan.com.

3. Watch your spending.

"It's so easy to swipe [a credit card] and not have a bearing on where that money's [coming from]," Podzius says. Instead, take a hard look at how much you spend — and what you spend it on — each month, and whether you should re-evaluate and start saving instead. Apps like You Need a Budget, Mint, and LearnVest help put your finances in writing and send you alerts if your purchases are bigger than usual.

4. Consider the potentially ~crushing~ costs of grad school…

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Podzius says it's important to run your budget before enrolling. "If students saw what their backend payments on the student loans would be, it might make them make different financial choices," she says. Run the numbers, and figure out if a two-year program could be just as good as a four-year one, or if you should save money for a few years before heading back to school.

5. …But also consider that student loans can actually be a good thing.

Though you should obviously pay your student loan bills every month, there's no rush to get it all paid off ASAP. Experts say student loans are actually good debt to have, if you're going to have debt at all: Because the interest rate is relatively low, these loans can be tax-deductible, and it's debt you've taken on to earn more money later in life. The median student loan load is $35,000, but the average college graduate makes 98 percent more per hour than a high-school grad; though you might be stressed now, it's worth it. If you have credit-card debt or any other kind of debt, make that a higher priority, and try to save a little money too. And if you get a sudden windfall of cash, don't just finish paying off your loan in one burst. If you do, your credit score might suffer, because your credit report prioritizes having a mix of different credit lines and loans. Instead, put that money aside to pay off your loans in installments to boost your credit history.

6. Buy a used car instead of leasing a new car.

Consumers from age 18 to 34 are leasing cars at a higher rate than the rest of America, according to a report from Edmunds.com, sacrificing the benefits of paying off their owned cars so they can drive something bigger and flashier. But if you think longer-term, it makes sense to buy a cheaper used car, so your monthly payment is the same as leasing a fancier car, then pay it all off over time. "Leasing a car is the worst thing you could imaginably do," says Nicole Lapin, financial expert and author of Rich Bitch. If you buy a car, you can sell it when you want to move on and make (at least a little) money, but if you lease it, you've basically thrown the money away. And you're often limited when it comes to the number of miles you can drive before you have to turn it in, so good-bye, road trips. If a car means a lot to you, don't fall for the shiny-new-car trap, because it will lose value the minute you drive it off the lot. Sure, used cars also lose value, but you didn't pay as much for them in the first place, right? Buy a used version of your dream ride, even if it's only a few years old, and you'll save a ton of money.

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7. Start building credit.

If you don't have a credit card, you should get one in order to boost your credit history, Lapin says. If you don't have a credit history, it could come back to haunt you when you eventually want a mortgage or a car loan, which both require a good credit score. If you charge your Netflix subscription to the card every month, and pay it off in full, you're adding valuable information to your credit report. If you don't qualify for a credit card, Lapin recommends you try a secured credit card, which can help you boost credit if you put down a security deposit first. Just make sure to set up an automatic payment with your credit card to pay off the balance in full each month.

8. Invest in the stock market.

Only 26 percent of people under 30 say they own stocks, and it's pretty clear why. "Millennials in particular had a front-row seat to the financial crisis," Greg McBride from Bankrate.com says. "It scared them out of the stock market, and they have the most conservative investment stance of any age group." But you shouldn't totally cower when it comes to investing — if done right, it can make your money make money. Tom White of iQuantifi says you should think of your earnings this way: If you need the money over the next two years, keep it in a savings or checking account. If you won't need it for two to five years, invest in bonds. And if you don't need it for more than five years, invest in stocks, no matter how small the amount. But don't jump into the stock market unless you're already putting adequate money into your 401(k). If you're interested in testing out the stock market, most major banks have brokerage divisions who can help you get started, or check out online-only options like Wealthfront and ETrade.

9. Make the most of your taxes.

Taxes are insanely complicated, and that doesn't stop as you get older. But if you get a handle on your deductions now, it can be easier for later. If your employer offers it, Kathy Pickering from H&R Block recommends you sign up for a Health Savings Account (HSA). This account lets you contribute pre-tax dollars; this means your salary might be considered slightly lower come income tax time, which can save you money. Then, the money grows in your account, also tax-free, and you can withdraw that money tax-free, usually using a debit card, for medical expenses like dental care or contact lenses. A Flexible Spending Account (FSA) does similar things, but with restrictions like spending limits and no rollover from year to year. You are also eligible for tax deductions if you're in school, paying off student loans, own a home, or fall below a certain income threshold. The IRS has a comprehensive list of tax deductions on its website, and you should take the time to look it over before crunch time in April.